Explosive new evidence filed in a US bankruptcy court last week exposes some of the inner workings of the Mirror Trading International (MTI) liquidation process.
Several US investors are asking the bankruptcy court in southern Florida to scratch any evidence provided by MTI crypto expert Craig Pedersen after it was discovered that he was earning both an hourly rate of R2 000 for his services, as well as 5% on any bitcoin recoveries.
Pedersen failed to disclose his compensation arrangement with MTI, and “testified falsely and evasively” when questioned under oath by the US court, according to papers before the Southern District of Florida bankruptcy court in Fort Lauderdale.
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Adding insult to injury for investors
The court filings have infuriated MTI investors now being pursued in courts around the world for bitcoin they withdrew from the scheme and are now being asked to repay, but at today’s prices.
More than 29 000 bitcoin were funnelled through MTI on promises that investors could earn 10% a month through a trading bot that was found not to exist. Instead, mastermind Johann Steynberg – who fled to Brazil in 2020, where he reportedly died in April 2024 – paid out older claims with new bitcoin received in what was a classic Ponzi scheme.
“This disclosure of a bounty of 5% on every bitcoin recovered by the supposedly independent expert advisor stinks of conflicted interests,” says one expert representing several MTI investors and who asked not to be named.
“It explains why the liquidators are reluctant to settle other than in cases where the defendants are clearly unable to pay.
“There are cases where people’s homes are under threat of being taken away over this. This needs to be stopped.”
Says John Lister, an attorney representing hundreds of MTI investors: “This is hugely concerning because in the numerous MTI cases where I represent defendants in South Africa who were duped by Steynberg essentially, expert notices have been given that Craig Pedersen and [advocate and expert advisor] Vaughn Victor will give evidence. It would seem that there are massive conflicts of interests that should be investigated immediately.”
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‘Preposterous strategy’
One MTI investor from California, Karim Hanna, invested 30 bitcoin (BTC) in 2020 when its price was about $13 000.
He was repaid 24 BTC, leaving a shortfall of six BTC, worth roughly $75 000 at the 2020 prices.
Yet the liquidators want him to repay all 24 BTC he was repaid five years ago, but at today’s price, which amounts to more than $2.6 million (R44.5 million).
Hanna’s lawyers say he is a crime victim, since it is acknowledged that MTI was a criminal scheme.
The six US investors who brought the case in Florida are being sued for 107 BTC worth $11 million (R188 million).
They claim the liquidators’ plan appears to be disgorge as much of the 29 000-plus BTC transferred to MTI in the last six months of the scheme (worth about $3.2 billion or R55 billion today) by pursuing investors around the world – and then ‘explode’ the creditor body from $93 million to $3.36 billion.
They will then distribute this inflated pot to creditors, less professional fees.
“It is to further this preposterous strategy – which will reap years of fees for 12 South African-based liquidators and their professionals – that [MTI’s foreign representative] brought this … case and invoked the United States judicial system,” say the court filings in the US.
Hanna has used the US court discovery process to find out how much the liquidators and their professionals have been paid. The liquidators have asked for more time to respond.
Moneyweb reported that of the R1.1 billion in bitcoin recovered from Belize-based broker FXChoice, just half of this remains once the South African Revenue Service (Sars), lawyers and professionals have taken their cut.
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‘Expert report’
The MTI liquidators engaged the services of TCG Digital Forensics, owned by Craig Pedersen, as experts on insolvency and Ponzi and pyramid schemes.
TCG was hired to provide expert opinions through a report, which was compiled by Pedersen, his brother Thor and Vaughn Victor.
“The Pedersen Report fails properly to disclose TCG’s compensation. This violates Federal Rule of Civil Procedure,” say the US investors’ court filings.
The authors also fail to disclose previous publications authored in the last 10 years and other cases in which they served as experts within the last four years, as required under US law.
Pedersen was deposed by the US court in September 2025, where the transcript shows he at first denied he had a financial interest in the outcome of the US court case on which his expert opinion depended, and then later changed his tune, admitting he would earn a 5% contingency fee on any bitcoin recovered worldwide.
If the liquidators’ game plan succeeds, and assuming a BTC price of $110 000 (it is now down to $85 000), Pedersen could make as much as $160 million (R2.7 billion), say the US investors.
On Karim Hanna alone, he stood to make $130 000 (R2.2 million), but only if MTI wins the case.
Under questioning by the US court, Pedersen also admitted he was not much of an expert, deferring to his brother Thor as the true expert, and Vaughn Victor, though it was Pedersen’s signature on the report.
Pedersen also previously worked for Jacques Fischer, the trustee of the estate of the late Johann Steynberg. Fischer claims Steynberg’s estate, rather than MTI, owns the bitcoin recovered from FXChoice.
In his testimony before the US court, Pedersen said he was engaged by MTI to provide factual data, but was accused by the US lawyer of being evasive in disclosing the 5% contingency fee. Nor did he disclose the potentially conflicting work he did for Steynberg’s trustee as to the precise ownership of the bitcoin transferred from FXChoice.
ALSO READ: MTI bitcoin scam: Liquidators chasing additional R2bn in ‘possible debtors’
The US court rules require expert witnesses to disclose all compensation in their signed reports.
“Pedersen failed to do so, plainly violating Rule 26 [of the US court],” say the court filings.
“To compound matters, as reflected in the transcript, Pedersen was evasive and dishonest requiring examining counsel to chase down the truth including to confirm how the Fee Mandate worked and that the 5% contingency fee included the recoveries sought in these adversaries.
“All the while, the liquidator and his professionals watched in silence.”
The US lawyers say several MTI liquidators were on Zoom during Pedersen’s testimony, but had their cameras off and did not correct him when he allegedly misdirected the court over his payment arrangement.
This article was republished from Moneyweb. Read the original here.
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